PETALING JAYA: Cape EMS Bhd
insists it will remain vigilant in managing its business, despite navigating a challenging global landscape characterised by factors beyond its control including the ongoing US-China trade tensions, global geopolitical conflicts and the uncertain US dollar movement.
The group reiterated its commitment and focus on boosting its efficiency, competitiveness, and ability to quickly adapt to unexpected market shifts.
For the third quarter ended Sept 30, 2024 (3Q24), Cape EMS posted a net loss of RM18.95mil.
This was a reversal from a net profit of RM15.2mil achieved in the same quarter of 2023. Revenue, however, grew 4.4% year-on-year (y-o-y) to RM141.95mil.
For the first nine months of 2024, the group saw net earnings dive from RM38.9mil to RM3.2mil, despite turnover also increasing 17.2% y-o-y to RM463mil.
In a filing with Bursa Malaysia, Cape EMS pointed to its new subsidiary as the main contributor to its rise in earnings.
However, it explained that its electronic manufacturing services (EMS) segment saw a drop in income for consumer electronic products, particularly in electronic cigarettes.
Elaborating on its net loss for the quarter, the group said it was mainly due to a reduced gross profit margin, impacted by the customers’ cost down for both industrial and consumer electronic products, particularly on wireless communication equipment and electronic cigarettes respectively.
Compared with the preceding three months ended June 30, Cape EMS said revenue dropped 14.8% from RM166.6mil, due to the decrease in revenue arising from consumer electronic products.
It also made a net profit of RM8.7mil for 2Q24.
“Additionally, the loss in the current quarter was further contributed by the unrealised foreign-exchange loss of RM12.6mil due to the strengthening of the ringgit, amortisation of intangible assets of RM4.4mil as well as the impairment loss on trade receivables of RM2.2mil during the current quarter,” it said.
Cape EMS did not announce any dividends for 3Q24, although it had declared a dividend of 1.1 sen per share in the same period of last year.
Year-to-date, it has declared a dividend of 0.67 sen per share, announced in 1Q24.
With iConn Inc. integrated into the group, Cape EMS said it is transitioning to an asset-light manufacturing model.
It is incorporating both online and offline capabilities to increase efficiency, reduce capital expenditures and enhance its responsiveness to the evolving market landscape.
It said innovation remains a cornerstone of its strategy, with the group actively developing intellectual property to strengthen customer loyalty and generate licensing revenue.
Additionally, the firm said it is expanding into green technology solutions, particularly in battery pack manufacturing, to meet the growing demand for sustainability.
